It sounds like a programmer’s paradise: good pay and benefits, all the snack foods and soft drinks you can consume, blazingly fast hardware on your desktop, no set working hours and a quarterly bash where almost half the company’s profits are distributed back to the employees.

The people of Gearbox Software Inc. in Plano, Texas, have working conditions that most people would envy. But they work hard for the money. In an industry as tough as video game software, flexibility and perks help keep developers motivated, leading to smash-hit titles and big profits.

Video game software is a brutally competitive industry; only the top 5 percent of titles make a profit. But products that do well can make more money than a hit Hollywood movie. While a few publishers dominate the business, development is actually spread out among a network of small shops that come and go with breathtaking frequency. Developers may work for years on a title that never even sees the light of day, much less succeeds. And hiring and retention is a constant challenge in an atmosphere of constant job mobility.

Amidst that kind of industry tumult — sales of console-based video game software were down 12 percent in 2005, according to research firm NPD Group — Gearbox not only has thrived but is reaching the upper echelon of elite software developers. It has run off a string of successes, including enhancement packs or platform-specific versions of the enormously popular “Half-Life,” “Halo” and “Tony Hawk Pro Skater” games. Sales of all games produced by the company in its seven-year history exceed $350 million. “They are one of the top development studios in the industry,” says Tim Cummins, a spokesman for Ubisoft Entertainment, which publishes some Gearbox titles.

CEO Randy Pitchford, 35, chalks up Gearbox’s success to keeping the company’s goals focused on personal happiness, creativity and profit. A former professional magician who never finished college, Pitchford advocates consensual management and support for employees’ professional growth. The goal is not to sell Gearbox or take it public, he says, but rather to make it a great place to work.

Developing software for the demanding role-playing games (RPG) market is nothing like building run-of-the-mill commercial applications. The typical 30-year-old gamer spends an average of eight hours a week playing, according to the Entertainment Software Association, and roughly one-third of adult gamers spend 10 hours or more per week playing, compared to just 11 percent of teens who play that much. There are hundreds of enthusiast Web sites on which gamers swap tips, cheats and sermons about their favorite titles.

Gearbox’s 75 employees are among those enthusiasts. The company makes it a point to hire people who are as passionate about gaming as their customers, and gives them the high-end tools and technology infrastructure to express their passion. “We are all hard-core gamers,” says Pitchford.

Programmers in Arms

The company broke out of the pack in March 2005, when “Brothers in Arms: Road to Hill 30” hit the market, published by Ubisoft. A sequel — “Brothers in Arms: Earned in Blood” — debuted last October. The title, a “historic first-person shooter” in industry parlance, has sold 3 million units, according to Ubisoft. Gearbox rang up $25 million in revenue in 2005 and, at a 50 percent profit margin, made plenty of employees happy.

Photo: Courtesy of Gearbox

Retired Army Col. John Antal, Gearbox Software’s historical director, briefs employees during two days of intensive field training exercises in full battle gear.

The “Brothers in Arms” series is remarkable for its historical accuracy and an ingenious combination of the team strategy and shooter genres, says Shawn Elliott, previews editor of Computer Gaming World. “This game essentially connected squad control to a first-person shooter game. A lot of people would have thought those didn’t work together,” he says. “They made a really good game out of it.”

The game’s story was so accurate that the History Channel commissioned a two-hour documentary based on the game’s story of the 502nd Parachute Infantry Regiment’s ordeals during the 1944 Normandy invasion. In a novel twist, producers blended animated footage from the game into the documentary to dramatize historical accounts.

A successful and stable game developer can make a great deal of money, Pitchford explains. A video game that costs $30 million to produce can outsell a blockbuster motion picture costing five times as much. “Halo II” generated more than $250 million in its first day of sales. Some sources estimate that video gaming is already bigger than Hollywood entertainment. And gamers, on average, are younger than moviegoers, which means they’ll be regularly plunking down $50 for a box of software for years to come.

With “Brothers in Arms,” Gearbox established itself as the gold standard for historical precision. Staffers logged more than a dozen trips to Normandy, took thousands of photos of buildings and battlefields and mapped miles of the French countryside before coding began. Sixty employees also spent two days in an intensive field-training exercise in full battle gear run by John Antal, 51, a retired U.S. Army colonel and military historian who joined Gearbox in 2003 as historical director.

Gearing Up

The field exercise and mapping detail may seem excessive, but it’s all part of Gearbox’s commitment to making games an immersive experience. The effort appears to have paid off. Some reviews have suggested that “Brothers in Arms” single-handedly revived a World War II gaming genre that had lost its luster.

“We were trying to create what you might see in [the movie] ‘Saving Private Ryan’ but in an interactive, immersive experience,” says Antal, a seven-time author who has written role-playing books about combat. “Every battle in ‘Brothers in Arms’ actually occurred.”

“We felt that if we could get one customer to cry over the loss of a character then we had accomplished something,” adds 37-year-old Gearbox co-founder, Brian Martel.

Makers of role-playing games typically employ staff historians to provide a certain level of historical accuracy, says Computer Gaming World’s Elliott. But “Brothers in Arms” took the process to another level. “There’s definitely something different about the way they used the genre,” he says.

That’s because most video games are based on stories depicted in movies, says Gearbox’s Antal. The challenge of creating a great game is to take the immersive reality of film and make it interactive. Everything from dialogue to lighting to sounds must be accurate. Some Gearbox staffers went so far as to drive M-1 tanks and fire military sidearms to prepare for development. “In a few years, games will be so authentic that they may be better than life,” Antal says.

For Gearbox, the fun is just beginning. Martel says “Brothers in Arms 3” is in the works, and success gives the developers some room for experimentation. The company’s executives are finding that publishers are seeking them out. “I recently went to a conference and got a sense of what it feels like to be the prettiest girl in the room,” Martel says with a laugh.

But there are no plans to change the company’s principles of happiness, creativity and profitability. “I think we will be doing this until we’re no longer able,” says Pitchford.

Game software developers are a different breed. Highly intelligent, self-motivated and fiercely independent, they reflexively question authority and shun taking orders. They’re also in high demand: Any developer can walk out the door and have a new job in a day or two.

That makes Gearbox Software Inc.’s seven-year record of near-zero turnover pretty remarkable. Gearbox managers have to be creative to motivate their staff to work the 16- to 20-hour days that are typical when the product is about to ship. Gearbox operates by these five fundamental principles that have helped it to retain the best and brightest.

1Be Flexible. Gearbox tries to minimize stress by removing pointless restrictions. Programmers are free to come and go as they wish on the principle that highly motivated employees will do what it takes to get the job done. “I have programmers who come in at 4 p.m., and I might still see them there the next morning,” says CEO Randy Pitchford.

2Be Fun. Little things help employees feel appreciated. Gearbox stocks a convenience store-like assortment of snack foods and soft drinks that are free to all employees. Designers and developers, most of whom are also avid gamers, are encouraged to keep their skills in tune. The company maintains a lending library of “pretty much every video game ever made,” according to Pitchford. Staffers can check out games for up to several weeks using a catalog that’s maintained on the company’s intranet.

3Be Inclusive. Company executives believe that consensus management is the only way to motivate a skilled technical staff. “If you say ‘Jump’ [to our people] and you don’t make sense, they’re not going to ask ‘How high?’ but ‘Why are we jumping at all?’” Pitchford says. The management team emphasizes consensus building at the earliest stages of a project. Projects get done more quickly when everybody is on board early, Pitchford contends. And good technical people really won’t operate any other way.

4Be on the Leading Edge. Gearbox gives its people access to the latest technology. A brand new EMC Clariion 17-terabyte disk array was recently added to the data center, along with a server chassis with support for up to 50 blades, according to Stephen Palmer, the company’s 27-year-old chief technology officer. Employees will soon have gigabit Ethernet on their desktops, and developers all have dual 20-inch LCD displays and are getting new dual-core CPU workstations with up to 4GB of RAM and internal RAID drives.

5Be Generous. Good pay is a given in the competitive game-software industry, but Gearbox goes a step further. Each employee gets an allowance of $1,000 per year to spend on home computer equipment. Once each quarter, the company throws an offsite party and distributes about 40 percent of the profits back to employees. Allocations are determined by a unique formula that incorporates longevity, project experience and peer recognition. “There are 20 people in this company who make the same royalty bonus that I do,” Pitchford says.

IT takeaway

Supporting software developers is not for technology spendthrifts. Gearbox’s IT infrastructure includes these high-end goodies to keep its programmers happy: